Summary
LlamaRisk supports the onboarding of USDe and sUSDe to the Aave V3 Base instance, contingent on improvement in local liquidity conditions. Base is a meaningful distribution venue for stablecoin borrowing and yield strategies, but the current sUSDe & USDe supply on the network remains limited and concentrated, which keeps liquidity stability and exit depth as key risk considerations.
While both assets are already well adopted within the Aave ecosystem, local market conditions on Base are still developing. In particular, available sUSDe supply is relatively small, and ownership concentration is elevated, which may increase sensitivity to single-entity balance movements and short-term liquidity dislocations. This is especially relevant if initial usage is driven by leverage or looping strategies, where utilization and borrowing conditions can change quickly.
Both sUSDe and USDe are owned by a multisig; sensitive functions such as ownership transfer and the ability to delegate admin functions that can affect transfer rates between chains represent the main access control risk considerations.
1. Asset Fundamental Characteristics
1.1 Asset
USDe is a dollar-pegged stablecoin, backed by delta-neutral positions and liquid stablecoins. sUSDe is the yield-accruing asset of staking USDe. Extensive analyses of USDe and sUSDe have been conducted in the past, with previous reports detailing their underlying design and risk considerations, including: Asset Risk Assessment of Ethena’s USDe/sUSDe, Onboarding USDe on Ethereum, Adding sUSDE on Base, Onboarding USDe & sUSDe on Avalanche, and Onboarding sUSDe on Ethereum.
1.2 Architecture
sUSDe and USDe on Base are bridged through LayerZero infrastructure and utilize the Omnichain Fungible Token (OFT) standard. Since OFTs are already present on Aave markets, introducing the bridging mechanism or the underlying asset poses little additional architectural risk given their prior presence.
1.3 Tokenomics
The OFT standard debits from the source chain and credits on the destination chain whenever an asset is bridged, maintaining canonical supply.
1.3.1 Token Holder Concentration
Source: sUSDe token holders, Basescan, February 23th, 2026
On Base, the total available sUSDe supply is approximately 750k tokens, and holder concentration is high: the top three holders control 74.57% of the supply, all affiliated with Re Protocol, indicating that a single entity effectively controls nearly ¾ of the total available supply.
Top 5 holders of sUSDe on Base:
- Re Protocol: reUSD ICL Custodial Wallet - 54.72% (410,563.24 sUSDe)
- Re Protocol: Redemption Vault - 14.14% (106,145.38 sUSDe)
- Re Protocol: Redemption Reserve Custodian - 5.69% (42,744.64 sUSDe)
- EOA - 4.15% (31,172.75 sUSDe)
- EOA - 3.34% (25,118.66 sUSDe)
Source: USDe token holders, Basescan, February 23rd, 2026
USDe supply on Base is also heavily concentrated, with the address affiliated with Relay, alone holding more than 70% of the total outstanding supply.
Top 5 visible holders of USDe on Base (from the chart snapshot):
- Relay: Solver - 74.03% (442,263.1 USDe)
- EOA - 4.31% (25,765.87 USDe)
- EOA - 4.19% (25,057 USDe)
- EOA - 1.67% (9,992.94 USDe)
- EOA (0xcryptobuff.eth) - 1.54% (9,233.96 USDe)
2. Market Risk
2.1 Liquidity
Source: USDe to USDC swap, DefiLlama, February 23rd, 2026
On Base, USDe has effectively negligible on-chain liquidity: a modest 13,000 USDe sell into USDC triggers a ~9.80% price impact, returning only ~11,711.1 USDC before fees.
Source: sUSDe to USDC swap, DefiLlama, February 23rd, 2026
sUSDe on-chain liquidity is also limited: a 6,700 sUSDe swap into USDC shows ~9.67% price impact, with the quote dropping to ~7,382.4 USDC before fees.
2.1.1 Liquidity Venue Concentration
Source: USDe/USDC pools, Uniswap, February 23rd, 2026
USDe liquidity on Base appears to be highly concentrated in Uniswap pools, with the market depth split across two USDe/USDC pools: a Uniswap v4 pool with $13.3k TVL and a Uniswap v3 pool with $7.2k TVL.
Source: wstETH/sUSDe pool, InfinityPools, February 23rd, 2026
Source: cbBTC/sUSDe pool, InfinityPools, February 23rd, 2026
Source: sUSDe/USDC pool, InfinityPools, February 23rd, 2026
On Base, sUSDe liquidity is currently fragmented across three primary DEX pools paired against wstETH, cbBTC, and USDC. Observed total value locked remains limited, with approximately ~$8,495k in the sUSDe/wstETH pool, ~$5402k in the sUSDe/cbBTC pool, and ~$33,143k in the sUSDe/USDC pool.
This represents a material contraction versus the February 2025 assessment, when sUSDe liquidity on Base was still in a bootstrap phase. The subsequent reduction in secondary market liquidity is consistent with lower incentive support, resulting in thinner pool depth, reduced execution capacity, and higher slippage sensitivity.
2.1.2 DEX LP Concentration
The Uniswap USDe/USDC pool currently has 9 unique LP providers, and on-chain liquidity remains limited and concentrated. The largest liquidity provision is attributable to a KyberSwap contract, which is the dominant LP in the pool and holds an aggregate position of approximately 2,999.61 USDC.
2.2 Volatility
Source: USDe/USDC price, Geckoterminal, February 23rd, 2026
Source: sUSDe/USDC price, Dexscreener, February 23rd, 2026
USDe and sUSDe have continued to maintain close peg stability in observed market trading, with prices generally remaining anchored around their intended reference value.
2.3 Exchanges
USDe is listed on multiple exchanges, including Binance, Bybit, MEXC, Bitunix, and KuCoin, among others.
sUSDe is not listed on exchanges.
2.4 Growth
2.4.1 Ethena’s Current State
Since our last analysis, Ethena’s development was marked by deeper Aave integration and the rollout of Liquid Leverage for sUSDe strategies. Protocol TVL climbed to an all-time peak around October, reaching roughly $9B+ in supply, before entering a sustained decline that followed the October tariff shock and broader risk-off repricing across crypto markets. Since Liquid Leverage was launched on Aave as an integration/strategy layer, Ethena’s growth profile became more directly linked to leverage demand and loop profitability across the Aave market, increasing the share of TVL that can respond quickly to shifts in funding rates and risk sentiment.
Source: LlamaRisk’s Ethena Risk Dashboard, February 23rd, 2026
2.4.2 USDe/sUSDe Supply
The total supply of USDe stands at 6.1B, with 3.5B (58.5%) staked to sUSDe. The ratio of USDe supply staked in sUSDe is down to 58.5% from the high of 77.37%.
Source: LlamaRisk’s Ethena Risk Dashboard, February 23rd, 2026
2.4.3 Growth on Base
Source: USDe & sUSDe supply growth, Dune, February 23rd, 2026
Focusing on sUSDe supply on Base, the token was bootstrapped in early 2025 and reached approximately 3.1m sUSDe, after which supply entered a prolonged decline. The initial supply was highly concentrated in a few DEX pools, indicating a bootstrap-driven market structure. The subsequent drawdown is consistent with reduced incentive support and shallow secondary-market liquidity.
Base activity in USDe was linked to the same narrow local market structure and concentrated venue footprint, and observed secondary-market liquidity later became materially thinner than during the initial bootstrap phase. As a result, USDe liquidity on Base appeared limited and concentrated, with weaker execution depth.
2.5 Utility & Stability
The current compressed funding and basis environment has reduced sUSDe yields by lowering the monetizable carry available to Ethena’s delta-hedged strategy set. In the same period, weaker funding conditions and lower derivatives activity reduced the attractiveness of maintaining prior hedge positioning at scale, contributing to a reallocation of USDe backing toward more liquid stablecoin balances. Ethena’s liquid cash allocation increased to ~73.9% ($4.52B), indicating a more defensive balance-sheet posture during the lower-yield period.
Source: LlamaRisk’s Ethena Risk Dashboard, February 23rd, 2026
Source: LlamaRisk’s Ethena Risk Dashboard, February 23rd, 2026
The protocol has maintained the recommended levels of reserve fund capital, which currently stand at $61.9m. It provides a 1.28% over-collateralization buffer for the USDe stablecoin.
Source: LlamaRisk’s Ethena Risk Dashboard, February 23rd, 2026
3. Technological Risk
3.1 Smart Contract Risk
An audit was performed on the Ethena OFT code on January 16th, 2025, by Zellic. This audit on the LayerZero codebase specific to Ethena found no issues of any level.
3.2 Bug Bounty Program
LayerZero and Ethena both have bug bounties, with max bounties worth $15.5M and $3M, respectively. OFT, USDe, and sUSDe smart contracts are explicitly stated in the program’s scopes.
4. Counterparty Risk
4.1 Access Control Risk
OFTs inherit the OpenZeppelin Ownable Standard, with sUSDe and USDe implementing a 2-step ownership process through OFTOwnable2Step. The owner of the contract has admin rights (transfer or renounce ownership) and the ability to set the address of the rateLimiter contract, which enables the owner or the rate limiter contract to modify the rate limits for transfers between chains.
Loss of ownership or a malicious rate limiter address being set would relinquish control of sUSDe and USDe contracts, risking interruption or halts of transfers back to the canonical chain or onto Base.
4.2.1 Contract Modification Options
The Base sUSDe/USDe OFT deployment contracts do not have proxy-based code upgradeability; the identified contract modification surface is limited to owner-controlled administrative configuration.
4.2.2 Timelock Duration and Function
No timelock is present in either contract.
4.2.3 Multisig Threshold / Signer identity
On Base, sUSDe and USDe are owned by a Safe Multisig.
Note: This assessment follows the LLR-Aave Framework, a comprehensive methodology for asset onboarding and parameterization in Aave V3. This framework is continuously updated and available here.
Aave V3 Specific Parameters
Will be presented jointly with @ChaosLabs when the liquidity conditions justify the onboarding.
Price feed Recommendation
We recommend the utilization of an sUSDe/USDe exchange rate feed, with underlying USDe priced using the Chainlink USDT/USD feed, as used by all USDe-denominated assets within the Aave ecosystem.
Disclaimer
This review was independently prepared by LlamaRisk, a community-led decentralized organization funded in part by the Aave DAO. LlamaRisk serves as Ethena’s Risk Committee member and an independent attestor of Ethena’s PoR solution. LlamaRisk did not receive compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.